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Matthias Knab, Opalesque for New Managers:

UBS Asset Management's latest outlook reveals why alternatives have moved from portfolio satellite to strategic core - and what it means for allocators

The investment landscape has undergone a fundamental transformation. What began as a gradual shift toward alternative assets has accelerated into a wholesale reimagining of how institutional portfolios are constructed and managed. According to UBS Asset Management's latest "Red Thread" publication, alternatives are no longer simply a diversification tool - they have become essential to achieving the return and risk objectives that traditional assets alone cannot deliver.

This evolution reflects more than capital rotation. It represents a structural response to persistent challenges: elevated inflation, geopolitical uncertainty, and the breakdown of traditional correlation patterns between stocks and bonds. As Barry Gill, Head of Investments at UBS Asset Management, notes in the report, "What we are witnessing is not simply a rotation of capital, but a fundamental reshaping of portfolios."

The Numbers Tell the Story

Private market assets under management have grown to approximately $15.1 trillion by the end of 2024, according to data from PitchBook and Preqin cited in the report. More significant than the absolute growth is the shift in who is driving it. While pen......................

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